Exhibit 10.2


 


EXECUTION VERSION


 


SECURITY AGREEMENT


 


THIS SECURITY AGREEMENT
(together with all amendments, supplements and other modifications, if any, from time to time made hereto, this “Security
Agreement”), dated as of July 20, 2018 made by and among Golub Capital BDC 2010-1 LLC, a Delaware limited liability company
(the “Borrower”), Morgan Stanley Senior Funding, Inc., as administrative agent (in such capacity, the “Administrative
Agent”) and U.S. Bank National Association, as collateral agent (the “Collateral Agent”).


 


WITNESSETH:


 


A.           The
Borrower, Morgan Stanley Bank, N.A., as lender (the “Lender” and, together with its permitted successors
and assigns, the “Lenders”), the Administrative Agent and the Collateral Agent are parties to a credit agreement
(together with all amendments and other modifications, if any, from time to time thereafter made thereto, the “Credit
Agreement”) of even date herewith.


 


B.           Pursuant
to the Credit Agreement, the Collateral Agent has been appointed by the Lenders and the Administrative Agent to act as secured
party under, and otherwise enter into and perform, this Security Agreement.


 


C.           In
order to induce the Lenders and the Administrative Agent to enter into the Credit Agreement, the Borrower has agreed to enter into
this Security Agreement and Grant a continuing security interest in the Collateral to the Collateral Agent for the benefit of the
Lenders, the Collateral Agent, the Securities Intermediary and the Administrative Agent (collectively, the “Secured Parties”).


 


D.           It
is in the best interests of the Borrower to execute this Security Agreement inasmuch as the Borrower will derive substantial benefits
from the transactions contemplated by the Credit Agreement.


 


For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE
I



DEFINITIONS


 


SECTION 1.1           Certain
Terms. The following terms when used in this Security Agreement, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and plural forms thereof):


 


“Available
Amount”: means (a) all payments in respect of principal and interest, commitment fees and any other fees or other
amounts received by the Borrower in respect of any Pledged Asset, (b) all amounts received by the Borrower in connection with
the Liquidation of any Pledged Asset and (c) all amounts on deposit in the Custodial Account or the Reserve Account, in each
case without duplication and to the extent such amounts have not been distributed in accordance with this Security Agreement.


 




     


     


    

 


“Borrower”:
is defined in the preamble.


 


“CLO Proceeds”:
means the proceeds of the issuance of the CLO Securities that are received by the Collateral Agent from the Borrower on the Closing
Date for application in accordance with Section 6.2(b).


 


“CLO Securities”:
is defined in the Credit Agreement.


 


“CLO Subordinated
Notes”: means the CLO Securities entitled “subordinated notes” (or the equivalent thereof) and ranking lowest
in payment priority among the CLO Securities.


 


“Collateral”:
is defined in Section 2.1.


 


“Collateral
Agent”: is defined in the preamble.


 


“Collateral
Agent Rating Requirement”: a requirement that the Collateral Agent shall at all times have a long-term deposit rating
(or, if the Collateral Agent is a wholly owned subsidiary of a bank holding company and not rated, the bank holding company shall
have a long-term senior unsecured debt rating) of at least “Baa1” by Moody’s (and, if rated “Baa1”,
such rating shall not be on watch for downgrade) and of at least “BBB-” by S&P.


 


“Collateral
Documents”: is defined in the Credit Agreement.


 


“Credit Agreement”:
is defined in the recitals.


 


“Custodial
Account”: is defined in Section 2.2.


 


“Deliver”
or “Delivered”: is defined in the Credit Agreement.


 


“Eligible
Investments”: means (a) cash and (b) any United States dollar denominated investment that, at the time it is
delivered to the Securities Intermediary (directly or through a financial intermediary or bailee), is one or more of the following
obligations or securities: (i) demand and time deposits in, certificates of deposit of, bank deposit products of, interest-bearing
trust accounts held by, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company
incorporated under the laws of the United States of America (including the Securities Intermediary) or any State thereof and subject
to supervision and examination by federal and/or State banking authorities so long as the commercial paper and/or the debt obligations
of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system,
the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing
for such investment have a credit rating of “P-1” by Moody’s Investors Service, Inc. (“Moody’s”)
and at least “A-1” by S&P, in the case of commercial paper and short-term debt obligations; provided that
in the case of commercial paper and short-term debt obligations with a maturity of longer than 91 days, the issuer thereof
must also have at the time of such investment a long-term credit rating by Moody’s of at least Moody’s then-current
long-term sovereign rating of the United States and by S&P of at least S&P’s then-current long-term sovereign rating
of the United States; (ii) direct obligations of, and obligations the timely payment of principal and interest on which is
fully and expressly guaranteed by, the United States of America or any agency or instrumentality of the United States of America
the obligations of which are expressly backed by the full faith and credit of the United States of America; (iii) offshore
money market funds which have, at all times, credit ratings of “Aaa” and “MR1+” by Moody’s and “AAAm”
or “AAAm-G” by S&P, respectively; and (iv) commercial paper or other short-term obligations with short-term
credit ratings of “P-l” from Moody’s and “A-l” from S&P or, in the case of any such Eligible
Investment with a maturity of longer than 91 days, long-term credit rating by Moody’s of at least Moody’s then-current
long-term sovereign rating of the United States and by S&P of at least S&P’s then-current long-term sovereign rating
of the United States, and that either bear interest or are sold at a discount from the face amount thereof and have a maturity
of not more than 183 days from their date of issuance and such maturity is not extendable. For the avoidance of doubt, “Eligible
Investments” may include investments for which the Collateral Agent or its Affiliates shall act as offeror or provide services
and receive compensation.


 




    	 	-2-	 



     


    

 


“Event of
Default”: an Event of Default under the Credit Agreement.


 


“Grant”:
is defined in the Credit Agreement.


 


“Interest
Proceeds”: that portion of the Available Amount that represents interest, commitment fees and any other fees in respect
of interest.


 


“Lien”:
is defined in the Credit Agreement.


 


“Liquidate”:
is defined in the Credit Agreement.


 


“MS&Co.”:
is defined in the Credit Agreement.


 


“Net Realized
Gains”: means the positive difference, if any, of all Realized Gains minus Realized Losses.


 


“Obligations”:
is defined in the Credit Agreement.


 


“Payments”:
means amounts received in respect of principal (or accrued interest on any Warehouse Asset that was purchased by the Borrower)
with respect to a Warehouse Asset or proceeds received in connection with any Warehouse Asset that is Liquidated in whole or in
part.


 


“Pledged Assets”:
is defined in the Credit Agreement.


 


“Prepayment
Date”: is defined in the Credit Agreement.


 


“Proceeds”:
is defined in the Credit Agreement.


 


“Realized
Gain”: means, with respect to each Warehouse Asset, an amount equal to the greater of (i) zero and (ii) the
amount, if any, by which (x) the proceeds of any sale or other disposition (including principal prepayments and the amount
of the remaining unfunded commitment of any Delayed Drawdown Debt Obligation) of all or a portion of the principal balance of such
Warehouse Asset exceeds (y) the product of (A) the principal balance of the portion of such Warehouse Asset sold or disposed
of (including principal prepayments and the amount of the remaining unfunded commitment) multiplied by (B) the purchase price
for such Warehouse Asset (expressed as a percentage of par).


 




    	 	-3-	 



     


    

 


“Realized
Loss”: means, with respect to each Warehouse Asset, an amount equal to the amount, if any, by which (x) the proceeds
of any sale or other disposition (including principal prepayments and the amount of the remaining unfunded commitment of any Delayed
Drawdown Debt Obligation) of all or a portion of the principal balance of such Warehouse Asset is less than (y) the product
of (A) the principal balance of the portion of such Warehouse Asset sold or disposed of (including principal prepayments and
the amount of the remaining unfunded commitment) multiplied by (B) the purchase price for such Warehouse Asset (expressed
as a percentage of par).


 


"Redemption
Amount": an amount equal to the difference of (a) the sum of (i) the market value (as determined by the Warehouse Collateral
Manager) of the Warehouse Assets owned by the Borrower on the Pricing Date as of the Pricing Date, plus (ii) the purchase price
of Warehouse Assets acquired by the Borrower between the Pricing Date and the Closing Date, plus (iii) cash and Eligible Investments
held by the Borrower as of the Closing Date plus (iv) accrued and unpaid interest, commitment fees and any other fees in respect
of interest on the Warehouse Assets set forth in clauses (i) and (ii) minus (b) the Advances outstanding and other amounts paid
to MS&Co. and the other secured parties to terminate the Credit Agreement pursuant to Section 6.2(b)(i), (ii), (iv).


 


“Reserve Account”:
is defined in Section 2.2.


 


“Securities
Account Control Agreement”: is defined in the Credit Agreement.


 


“Securities
Intermediary”: is defined in the Credit Agreement.


 


“UCC”:
the Uniform Commercial Code as in effect from time to time in the State of New York.


 


“Warehouse
Collateral Management Agreement”: is defined in the Credit Agreement.


 


“Warehouse
Collateral Manager”: is defined in the Credit Agreement.


 


SECTION 1.2           Additional
Definitions. Capitalized terms used but not otherwise defined in this Security Agreement shall have the respective meanings
specified in the Credit Agreement.


 


SECTION 1.3           UCC
Definitions. Unless otherwise defined herein or the context otherwise requires, terms defined in the UCC are used in this Security
Agreement as defined therein.


 




    	 	-4-	 



     


    

 


ARTICLE
II



PLEDGE; DELIVERY; ASSIGNMENT


 


SECTION 2.1           Grant
of Security Interest. As collateral security for the prompt and complete payment and performance in full when due (whether
at stated maturity, by acceleration or otherwise) of the Obligations, the Borrower hereby pledges, hypothecates, assigns, charges,
mortgages, delivers, and transfers the Collateral (as defined below) to the Collateral Agent for the benefit of the Secured Parties,
and Grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in all of the Borrower’s
right, title and interest in any of the following property now owned or at any time hereafter acquired by the Borrower or in which
the Borrower now has or at any time in the future acquires any right, title or interest: (a) each Pledged Asset, (b) the
Custodial Account, the Reserve Account and any Pledged Asset or other property from time to time credited thereto, (c) the
Borrower’s rights under the Warehouse Collateral Management Agreement and (d) all Proceeds of any of the foregoing (items (a)-(d)
collectively, the “Collateral”). For the avoidance of doubt, the Collateral Agent, the Administrative Agent
and the Lenders shall have the right, but not the duty, to file a financing statement covering all assets of the Borrower as collateral
therein against the Borrower, as debtor.


 


SECTION 2.2           Delivery
and Other Perfection. In furtherance of the collateral arrangements contemplated herein, the Borrower shall:


 


(a)          On
or prior to the date hereof, (i) establish at the Securities Intermediary a segregated trust account to be designated the
custodial account (the “Custodial Account”), in the name of “Golub Capital BDC 2010-1 LLC, subject to
the lien of U.S. Bank National Association as Collateral Agent for the benefit of the Secured Parties”, which shall be held
by the Securities Intermediary in accordance with the Securities Account Control Agreement, and which may include subaccounts for
the collection of principal and interest (the “Interest Collection Account” and the “Principal Collection
Account”), (ii)  establish at the Securities Intermediary a segregated trust account to be designated the reserve
account (the “Reserve Account”), in the name of “Golub Capital BDC 2010-1 LLC, subject to the lien of
U.S. Bank National Association as Collateral Agent for the benefit of the Secured Parties”, which shall be held by the Securities
Intermediary in accordance with the Securities Account Control Agreement and (iii) execute, and cause the Securities Intermediary
to execute, the Securities Account Control Agreement. The only permitted withdrawals from amounts on deposit in the Custodial Account
shall be to acquire Warehouse Assets and Eligible Investments at the direction of the Warehouse Collateral Manager (except during
the continuance of an Event of Default, when such direction must be given by the Administrative Agent) in compliance with the Credit
Documents and to pay amounts payable under Article VI below. The only permitted withdrawals from amounts on deposit
in the Reserve Account shall be to acquire Eligible Investments at the direction of the Warehouse Collateral Manager, to pay amounts
required to be paid in connection with Delayed Drawdown Debt Obligations in accordance with Section 2.03(b) of the Credit
Agreement and to transfer funds or Eligible Investments to the Custodial Account as required under Section 2.03(b) of the
Credit Agreement. In addition, amounts deposited in the Custodial Account or the Reserve Account in error may be withdrawn at the
direction of the Warehouse Collateral Manager (with the consent of the Administrative Agent) (except during the continuance of
an Event of Default, when such direction must be given by the Administrative Agent). The Collateral Agent shall not have any liability
for any loss on investment made in accordance with this Section 2.2.


 




    	 	-5-	 



     


    

 


(b)          Cause
the Collateral to be Delivered to the Collateral Agent.


 


(c)          If
any of the securities, monies or property pledged by the Borrower hereunder are received by the Borrower, forthwith take such action
as is necessary to ensure the Collateral Agent’s continuing first priority perfected security interest in such Collateral.
The Collateral Agent shall have the right to open such subaccounts of any such accounts as it deems necessary or appropriate for
the convenience of administration.


 


SECTION 2.3           Assignment
of Warehouse Collateral Management Agreement. The Borrower, as collateral security for the prompt and complete payment and
performance in full when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, hereby assigns, transfers
and conveys to the Collateral Agent, for the benefit of the Secured Parties, all of the Borrower’s right, title and interest
in, to and under the Warehouse Collateral Management Agreement. Upon release of the security interest in the Collateral in accordance
with Section 2.5 hereof, this assignment and all rights herein assigned to the Collateral Agent shall cease and terminate
and all of the estate, right, title and interest of the Collateral Agent in, to and under the Warehouse Collateral Management Agreement
shall revert to the Borrower and no further instrument or act shall be necessary to evidence such termination and reversion.


 


SECTION 2.4           Powers
Coupled with an Interest. All authorizations and agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.


 


SECTION 2.5           Release
of Security Interest. Upon termination of the Credit Documents and payment and satisfaction in full by the Borrower of all
Obligations (other than contingent obligations which are not then due and payable), the Collateral Agent on behalf of the Lenders
and the Administrative Agent, and at the direction of the Administrative Agent, shall release its security interest in the Collateral.


 


ARTICLE
III



REPRESENTATIONS AND WARRANTIES


 


SECTION 3.1           Warranties,
etc. The Borrower hereby represents and warrants to the Collateral Agent and the Administrative Agent and the Lenders, as of
the date of each pledge and Delivery hereunder by the Borrower to the Collateral Agent of any Collateral, as set forth in this
Article.


 


SECTION 3.2           Ownership,
No Liens, etc.


 


(a)          The
Borrower is the sole legal and beneficial owner of the Collateral free and clear of any Liens or encumbrances of any nature, except
as described in Section 3.2(f) and such as may have been filed in favor of the Collateral Agent pursuant to this Security
Agreement. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, including without limitation the filing office of the Secretary of State of the State of Delaware,
except such as may have been filed in favor of the Collateral Agent pursuant to this Security Agreement.


 




    	 	-6-	 



     


    

 


(b)          The
Borrower has acquired its ownership in the Collateral in good faith without notice of any adverse claim (other than any lien in
favor of the Collateral Agent created pursuant to the Collateral Documents).


 


(c)          The
Borrower has not assigned, pledged or otherwise encumbered any interest in any Collateral other than as described in Section
3.2(f) and security interests Granted pursuant to this Security Agreement or the other Collateral Documents.


 


(d)          The
Borrower has full right to Grant a first priority security interest in and pledge, hypothecate, assign, charge, mortgage, deliver
and transfer the Collateral to the Collateral Agent.


 


(e)          The
Grant by the Borrower of the first priority security interest hereunder, the Delivery of the Collateral as set forth hereunder
and the signing of the Securities Account Control Agreement are effective to create a valid, perfected, first priority security
interest in favor of the Collateral Agent in the Collateral.


 


(f)           The
Borrower covenants and agrees to cause the redemption in whole and discharge of its obligations under that certain Indenture, dated
as of July 16, 2010, by and between the Borrower and U.S. Bank National Association, as trustee promptly upon receipt of amounts
funded for such purpose under the Credit Agreement.


 


SECTION 3.3           Authorization,
Approval, etc. Except for a financing statement with respect to the Collateral in favor of the Collateral Agent filed with
the filing office of the Secretary of State of the State of Delaware, no authorization, approval, or other action by, and no notice
to or filing with, any governmental authority, regulatory body or any other person or entity is required either for the pledge
by the Borrower of any Collateral pursuant to this Security Agreement, for the validity, perfection or priority of security interest
in such Collateral or for the exercise by the Collateral Agent of the rights provided for in this Security Agreement or the remedies
in respect of the Collateral pursuant to this Security Agreement.


 


SECTION 3.4           Compliance
with Laws. The Borrower is in compliance with the requirements of all applicable laws, rules, regulations and orders of every
governmental authority, the non-compliance with which might materially adversely affect the value of the Collateral as collateral
security.


 


SECTION 3.5           Office
of Borrower. The Borrower represents and warrants that its sole place of business and registered office is located at its address
set forth in the Credit Agreement. The Borrower has no trade name.


 




    	 	-7-	 



     


    

 


ARTICLE
IV



COVENANTS; REMEDIES


 


SECTION 4.1           Covenants.
Except as expressly provided in the Credit Agreement, the Borrower will not, without the prior written consent of the Administrative
Agent (which consent may be withheld in its sole discretion), with respect to any Collateral, Liquidate, except as provided in
the Credit Agreement, exchange, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer such
to exist), such Collateral (other than pursuant to the Collateral Documents to the Collateral Agent for the benefit of the Secured
Parties).


 


SECTION 4.2           Remedies,
etc. Upon the occurrence and continuance of an Event of Default:


 


(a)          The
Collateral Agent shall, at the direction of the Administrative Agent, exercise in respect of the Collateral any remedies provided
for by the Collateral Documents in accordance with the terms thereof or any other remedies provided by applicable law, including,
without limitation, rights and remedies of a secured party under the UCC.


 


(b)          Subject
to Section 4.7, the Collateral Agent shall, at the direction of the Administrative Agent, without notice except as
specified below, Liquidate the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Collateral
Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Administrative
Agent may deem commercially reasonable. Subject to Section 4.7 the Administrative Agent and its Affiliates shall have
the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, auction
or closed tender, to purchase the whole or any part of the Warehouse Assets so Liquidated, free of any right or equity of redemption
in the Borrower, which right or equity is hereby waived or released. To the extent permitted by applicable law, the Borrower waives
all claims, damages and demands it may acquire against the Administrative Agent or the Collateral Agent arising out of the exercise
by the Administrative Agent or the Collateral Agent of any of their respective rights hereunder. The Borrower agrees that, to the
extent notice of sale shall be required by law, ten days’ prior notice to the Borrower of the time and place of any public
sale or the time after which any private sale is to be made shall constitute reasonable notification. The Collateral Agent (on
behalf of the Administrative Agent) shall not be obligated to make any sale of the Collateral regardless of notice of sale having
been given. The Collateral Agent shall, at the direction of the Administrative Agent, adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Borrower, the Warehouse Collateral Manager and the Equity Investors shall be given prior
notice of any such sale.


 


(c)          The
Collateral Agent shall, at the direction of the Administrative Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Borrower or the
Equity Investors:


 




    	 	-8-	 



     


    

 


		(i)	transfer all or any part of the Collateral into the
name of the Collateral Agent for the benefit of the Secured Parties, the Lenders, the Administrative Agent or the nominee of any
of the foregoing,



 


		(ii)	notify the parties obligated on any of the Collateral to
make payment to the Collateral Agent, the Administrative Agent or any Lender of any amount due or to become due thereunder,



 


		(iii)	enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether
or not longer than the original period) any obligations of any nature of any party with respect thereto,



 


		(iv)	endorse any checks, drafts, or other writings in the Borrower’s
name to allow collection of the Collateral,



 


		(v)	take control of any Proceeds of the Collateral,



 


		(vi)	execute (in the name, place and stead of the Borrower)
endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral,
and



 


		(vii)	perform such other acts as may be reasonably required to
do to protect the Collateral Agent’s rights and interest hereunder.



 


SECTION 4.3           Compliance
with Restrictions. The Borrower, the Equity Investors, the Lenders, the Administrative Agent and the Warehouse Collateral Manager
agree that in any sale of any of the Collateral whenever an Event of Default shall have occurred and be continuing, the Collateral
Agent is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by its
counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict
the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications,
and restrict such prospective bidders and purchasers to persons who will represent and agree that they are purchasing for their
own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchaser by any governmental regulatory authority or official, and the Borrower, the Equity Investors,
the Lenders, the Administrative Agent and the Warehouse Collateral Manager further agree that such compliance shall not result
in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Collateral Agent
be liable nor accountable to the Borrower, the Equity Investors or the Warehouse Collateral Manager for any discount allowed by
the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction.


 


SECTION 4.4           Change
Relating to Borrower. The Borrower covenants and agrees that it shall provide at least 10 days’ prior written notice
to the Collateral Agent and the Administrative Agent of (a) any proposed change to maintaining any of its books or records
with respect to the Collateral, at any office other than at the address referred to in Section 3.5 or maintaining its
registered office or its place of business at any place other than at the address referred to in Section 3.5, (b) any
proposed change of its name, or any name under which it does business, from the name shown on the signature page hereto or (c) any
proposed change to its type or jurisdiction of organization.


 




    	 	-9-	 



     


    

 


SECTION 4.5           Private
Sale. The Collateral Agent shall incur no liability as a result of a sale of the Collateral, or any part thereof, at any sale
pursuant to Section 4.2 conducted at the direction of the Administrative Agent. The Borrower, the Equity Investors
and the Warehouse Collateral Manager hereby waive any claims against the Collateral Agent and the Administrative Agent arising
by reason of the fact that the price at which the Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale.


 


SECTION 4.6           Further
Assurances. The Borrower covenants and agrees that, from time to time upon the written request of the Collateral Agent (as
directed by the Administrative Agent), the Borrower will execute and deliver such further documents, and do such other acts and
things as the Collateral Agent (as directed by the Administrative Agent) may reasonably request in order fully to effect the purposes
of this Security Agreement and to protect and preserve the priority and validity of the security interest Granted hereunder or
to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Borrower will:


 


(a)          if
any Collateral shall be evidenced by a promissory note or other instrument, negotiable document or chattel paper, deliver and pledge
to the Securities Intermediary, as the case may be, hereunder such promissory note or instrument, negotiable document or chattel
paper duly endorsed and accompanied by duly executed instruments of transfer or assignment; and


 


(b)          execute
and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Collateral Agent (as directed by the Administrative Agent) may request, in order to perfect and preserve
the assignment and security interest Granted hereby. With respect to the foregoing and the Grant of the security interest hereunder,
the Borrower hereby authorizes the Collateral Agent (as directed by the Administrative Agent) to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of the Borrower
where permitted by law; and the Collateral Agent agrees to notify the Borrower of any such action taken by it. In no event shall
the Collateral Agent be deemed to assume the obligations of the Borrower under this Section 4.6.


 




    	 	-10-	 



     


    

 


SECTION 4.7           Option
to Purchase Collateral. Notwithstanding anything to the contrary herein, in connection with any liquidation in full of the
Collateral, including without limitation, (a) upon the termination of the Commitment following the occurrence and during the
continuation of an Event of Default or (b) at the Scheduled Maturity Date, provided that, (x) in the case of each Equity
Investor an Event of Default described in Section 8.01(l) of the Credit Agreement has not occurred with respect to such Equity
Investor, and (y) in the case of the Warehouse Collateral Manager an Event of Default described in Section 8.01(l) of
the Credit Agreement has not occurred with respect to the Warehouse Collateral Manager, each Equity Investor or any of its Affiliates
shall, subject to the additional requirements set forth in this Section 4.7, have the right to purchase all (but not
less than all) of the Warehouse Assets included in the Collateral at a purchase price at least equal to the sum of the then outstanding
Obligations (including, without limitation, all amounts payable under Section 6.2(a)(i), Section 6.2(a)(iv)(A)
and Section 6.2(a)(v)), as reasonably determined by the Administrative Agent. Each of the Equity Investors and the
Warehouse Collateral Manager may exercise such right by giving written notice to the Borrower and the Administrative Agent (with
a copy to the Collateral Agent) of its election to exercise such right (the “Exercise Notice”) which shall include
a proposed purchase price and be delivered not later than 5:00 p.m. New York City time on the Scheduled Maturity Date
or the date on which each of the Equity Investors and the Warehouse Collateral Manager receive notice from the Administrative Agent
of the occurrence of such Event of Default and termination of the Commitment, as applicable; provided that if the Equity
Investors receive notice of an Event of Default and termination of the Commitment from the Administrative Agent after 2:00 p.m.
New York City time, the Exercise Notice shall be delivered not later than 9:00 a.m. New York City time on the Business
Day immediately following the date of such notice. Once an Exercise Notice is given by an Equity Investor or the Warehouse Collateral
Manager (subject to the immediately succeeding sentence), the Equity Investor or the Warehouse Collateral Manager (or its designated
Affiliate or managed fund) shall (subject to the immediately succeeding sentence) be obligated, irrevocably and unconditionally,
to purchase the Collateral, at the price referenced above, for settlement within the normal settlement period for such Collateral.
If more than one of the Warehouse Collateral Manager and/or an Equity Investor submits an Exercise Notice, the party submitting
the highest bid (as determined by the Administrative Agent) shall be the winning bidder. The cash purchase price must be received
no later than 10 Business Days following delivery of the Exercise Notice or, if earlier, upon settlement of the loan transfers.
The Administrative Agent shall not cause Liquidation of the Warehouse Assets to occur during the time that the Equity Investors
and the Warehouse Collateral Manager are entitled to provide an Exercise Notice. For the avoidance of doubt, (i) the sale
of Collateral by the Borrower as set forth in this Section 4.7 is not intended to be a foreclosure by the Collateral
Agent on any of the Collateral pursuant to a public or private sale under the UCC and (ii) the Issuer shall be required to
deliver the Collateral to one legal buyer in accordance with market settlement procedures.


 


ARTICLE
V



THE COLLATERAL AGENT


 


SECTION 5.1           Collateral
Agent Appointed Attorney-in-Fact. The Borrower hereby appoints the Collateral Agent as the Borrower’s attorney-in-fact
(it being understood that the Collateral Agent shall not be deemed to have assumed any of the obligations of the Borrower by this
appointment), with full authority in the place and stead of the Borrower and in the name of the Borrower, from time to time as
directed by the Administrative Agent, after the occurrence and during the continuation of an Event of Default, to take any action
and to execute any instrument which the Administrative Agent may deem necessary or advisable to accomplish the purposes of this
Security Agreement, including without limitation:


 


(a)          to
ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;


 




    	 	-11-	 



     


    

 


(b)          to
receive, endorse and collect any drafts or other instruments and documents, in connection with clause (a) above; and


 


(c)          to
file any claims or take any action or institute any proceedings that the Collateral Agent may deem necessary or desirable (or as
directed by the Administrative Agent) for the collection of any of the Collateral or otherwise to enforce the rights of the Collateral
Agent with respect to any of the Collateral.


 


The Borrower hereby
acknowledges, consents and agrees that the power of attorney granted pursuant to this Section 5.1 is irrevocable during
the term of this Security Agreement and is coupled with an interest.


 


SECTION 5.2           Collateral
Agent May Perform. The Collateral Agent shall from time to time take any action, which it is directed by the Administrative
Agent to take, for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.


 


SECTION 5.3           Collateral
Agent Has No Duty. The Collateral Agent shall have no fiduciary duty, obligation or responsibility to the Borrower, the Warehouse
Collateral Manager, the Administrative Agent, the Lenders, the Equity Investors or any indirect beneficiary of this Security Agreement
or the Collateral.


 


SECTION 5.4           Limitation
on Duties Regarding Preservation of Collateral. The Collateral Agent shall be deemed to have exercised reasonable care with
respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of
the UCC or otherwise, if it takes such action with respect to the Collateral as the Administrative Agent instructs. None of the
Collateral Agent, the Administrative Agent or any of their directors, officers or employees shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Borrower or otherwise.


 


SECTION 5.5           Certain
Rights and Obligations of the Collateral Agent. The Collateral Agent shall not enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in this Security Agreement or the Securities Account Control Agreement
without the prior written consent of the Administrative Agent; provided, however, that, without further written consent
or authorization from the Administrative Agent, the Collateral Agent may execute any documents or instruments necessary to release
any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted by the Credit
Agreement or as permitted or required under this Security Agreement and the Securities Account Control Agreement or to which the
Administrative Agent has otherwise consented. Anything contained in any of the Credit Documents to the contrary notwithstanding,
in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale, the Collateral
Agent or the Administrative Agent may be the purchaser of any or all of such Collateral at any such sale and the Collateral Agent,
as agent for and representative of the Administrative Agent, shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral payable by the Collateral Agent at such sale.


 




    	 	-12-	 



     


    

 


The Collateral Agent
shall maintain books and records with respect to the Collateral in a manner consistent with its practices with respect to comparable
collateral that it holds for others including, without limitation, records of the acquisition and Liquidation of all Warehouse
Assets.


 


The Collateral Agent
shall not have any duties or obligations except those expressly set forth in the Credit Documents. Without limiting the generality
of the foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether
a Default or an Event of Default has occurred and is continuing and (b) the Collateral Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers except as directed in writing by the Administrative Agent. The Collateral
Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Administrative Agent
or in the absence of its own gross negligence or willful misconduct. The Collateral Agent shall be deemed not to have knowledge
of any Default or Event of Default unless and until written notice thereof is given to the Collateral Agent by the Administrative
Agent, and the Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Credit Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, or (iii) the validity, enforceability, effectiveness or
genuineness of any Credit Document or any other agreement, instrument or document.


 


The Collateral Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it in good faith to be genuine and to have been signed or sent by
the proper Person. The Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it in
good faith to be made by the proper Person, and shall not incur any liability for relying thereon. The Collateral Agent may consult
with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it with due care,
and shall not be liable for any action taken or not taken by it in good faith in accordance with the advice of any such counsel,
accountants or experts.


 


The Collateral Agent
may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by
the Collateral Agent and shall have no liability for any negligence or misconduct on the part of any unaffiliated sub-agents; provided
the Collateral Agent has appointed such unaffiliated sub-agent with due care. The exculpatory provisions of the preceding paragraphs
shall apply to any sub-agent and to the Related Parties of the Collateral Agent and any sub-agent, and shall apply to their respective
activities as Collateral Agent.


 


In entering into this
Security Agreement, and in taking (or refraining from) any actions under or pursuant to this Security Agreement or other Collateral
Documents, the Collateral Agent shall be protected by and shall enjoy all of the rights, privileges, immunities, protections and
indemnities granted to it under the Collateral Documents. Notwithstanding any other provision to the contrary in any of the Collateral
Documents, the Collateral Agent shall not be required to take any action that it determines might involve it in liability (unless
the Collateral Agent has received satisfactory indemnity against such liability).


 




    	 	-13-	 



     


    

 


The Collateral Agent
shall in no event be liable for any special, indirect, consequential or punitive damages (including lost profits) arising from
or in connection with this Security Agreement, regardless of the nature of the claim and whether or not it has been apprised of
the likelihood thereof.


 


To help fight the funding
of terrorism and money laundering activities, the Collateral Agent shall obtain, verify, and record information that identifies
individuals or entities that establish a relationship or open an account with the Collateral Agent or its Affiliates. Such information
may include, but is not limited to the name, formation documents such as articles of incorporation, address, tax identification
number and other information that will allow the Collateral Agent to identify the individual or entity who is establishing the
relationship or opening the account.


 


In connection with
exercising any right or discretionary duty hereunder (including, without limitation, the exercise of any rights following the occurrence
of an Event of Default), the Collateral Agent shall be entitled to request and rely upon the direction of the Administrative Agent.
The Collateral Agent shall not have any liability for taking any action at and in accordance with such direction. The Collateral
Agent shall not be responsible for and makes no representation as to the validity or adequacy of this Security Agreement or the
Collateral Documents and it shall not be responsible for any statement in the recitals herein or therein.


 


In no event shall the
Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out
of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss
or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Collateral
Agent shall use reasonable best efforts which are consistent with accepted practices in the banking industry to maintain performance
and, if necessary, resume performance as soon as practicable under the circumstances.


 


SECTION 5.6           Collateral
Agent Fees. The Collateral Agent and the Securities Intermediary shall be paid such fees as are agreed to in writing by the
Collateral Agent and the Warehouse Collateral Manager in accordance with the priority of payments set forth in Section 6.2
below.


 


SECTION 5.7           Resignation;
Removal; Successor.


 


(a)          Subject
to the appointment and acceptance of a successor Collateral Agent as provided in Section 5.7(c) below, the Collateral
Agent may resign at any time by providing the Administrative Agent, the Warehouse Collateral Manager and the Borrower with 20 Business
Days prior written notice.


 


(b)          Subject
to Section 5.7(c) below, if at any time the Collateral Agent shall cease to meet the Collateral Agent Rating Requirement,
it shall notify the Borrower, the Warehouse Collateral Manager and the Administrative Agent of such ineligibility and shall be
removed immediately.


 




    	 	-14-	 



     


    

 


(c)          Upon
any resignation pursuant to Section 5.7(a) or removal pursuant to Section 5.7(b), the Administrative Agent
shall have the right to appoint a successor with the consent of the Warehouse Collateral Manager; provided, that, such successor
shall meet the Collateral Agent Rating Requirement. No resignation by, or removal of, the Collateral Agent shall be effective until
a successor has been appointed. Upon the acceptance of its appointment as Collateral Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Collateral Agent,
and the retiring Collateral Agent shall be discharged from its duties and obligations under the Credit Documents. After the Collateral
Agent’s resignation or removal hereunder, the provisions of Section 5.5 shall continue in effect for the benefit
of such retiring or removed Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Collateral Agent. In the event a successor collateral agent is not
appointed within 30 Business Days from the date of any removal or resignation notice, the Collateral Agent may petition a court
of competent jurisdiction for appointment of a successor.


 


Any person (i) into
which the Collateral Agent may be merged or consolidated, (ii) that may result from any merger or consolidation to which the
Collateral Agent shall be a party, or (iii) that may succeed to the corporate trust properties and assets of the Collateral
Agent substantially as a whole, shall be the successor to the Collateral Agent under this Security Agreement without further act
of any of the parties to this Security Agreement.


 


(d)          In
connection with exercising any right or discretionary duty hereunder (including, without limitation, the exercise of any rights
following the occurrence of an Event of Default), the Collateral Agent shall be entitled to request and rely upon the direction
of Administrative Agent. The Collateral Agent shall not have any liability for taking any action at and in accordance with such
direction. The Collateral Agent shall not be responsible for and makes no representation as to the validity or adequacy of this
Security Agreement or the Collateral Documents, and it shall not be responsible for any statement or recital herein or therein.


 


ARTICLE
VI



PRIORITY OF PAYMENTS; REPORTING


 


SECTION 6.1           Distribution
of Repayment and Liquidation Proceeds.


 


(a)          Unless
otherwise agreed to by the Administrative Agent, the Collateral Agent shall, if the Warehouse Collateral Manager on behalf of the
Borrower is unable to purchase a Warehouse Asset specified in the related Borrowing Request or if there are Advance proceeds remaining
after any such purchase, repay the outstanding Advances commencing with the longest outstanding Advance and ending with the most
recent Advance to the Lenders to repay the affected Advances.


 




    	 	-15-	 



     


    

 


(b)          On
each Business Day other than the Maturity Date (provided that such Business Day is not in connection with the Liquidation of all
or substantially all of the Warehouse Assets pursuant to which the provisions of Section 6.2(a) apply), the Borrower
hereby directs the Collateral Agent to apply (and the Collateral Agent shall apply) Payments on deposit in the Custodial Account
as of the close of business on the preceding Business Day in the following order of priority:


 


(i)          to
settle the purchase of additional Warehouse Assets on such Business Day, to the extent that the capital contributions of the Equity
Investors are insufficient therefor; and


 


(ii)         if
the aggregate Payments remaining on deposit in the Custodial Account after application pursuant to clause (i) above equals
or exceeds $500,000, first, to the extent a Borrowing Base Deficiency exists, to be applied to repay the principal amount of outstanding
Advances commencing with the longest outstanding Advance and ending with the most recent Advance, until such Borrowing Base Deficiency
is cured; second, at the Borrower’s option, so long as no Event of Default, Unmatured Event of Default or Borrowing Base
Deficiency is continuing, to the Borrower for distribution to the Equity Investors; and third, to retain in the Custodial Account
invested in Eligible Investments at the direction of the Warehouse Collateral Manager (except during the continuance of an Event
of Default, when such direction may be given by the Administrative Agent) until the earlier of (A) the date on which cash is required
to settle the purchase of additional Warehouse Assets, to the extent that the capital contributions of the Equity Investors are
insufficient therefor, and (B) the Maturity Date.


 


(c)          On
any date other than the Maturity Date on which the Borrower receives proceeds in connection with any capital contributions and
the Borrower elects to use such proceeds to make a prepayment of Advances pursuant to Section 2.07(a) of the Credit Agreement,
the Collateral Agent, as directed by the Administrative Agent, shall apply such amounts received by the Borrower with respect to
such capital contributions to repay outstanding Advances commencing with the longest outstanding Advance and ending with the most
recent Advance.


 


SECTION 6.2           Distributions
on the Maturity Date and following an Event of Default.


 


(a)          On
the Maturity Date (if the Closing Date does not occur) or following an Event of Default and the declaration of the Advances as
due and payable, the Collateral Agent, as directed by the Administrative Agent, shall distribute the Available Amount in the following
order of priority:


 


(i)          to
pay to the Administrative Agent, the Lenders, the Collateral Agent, and the Securities Intermediary, pro rata and pari
passu, any reasonably and documented fees, costs and out-of-pocket expenses relating to the Liquidation of the Warehouse Assets,
the termination of the Credit Documents, and exercise by the Administrative Agent, the Lenders and the Collateral Agent and the
Securities Intermediary of their respective rights and remedies under the Credit Documents;


 


(ii)         to
pay to the Administrative Agent for distribution to the Lenders interest due with respect to all Advances until such amounts are
paid in full;


 




    	 	-16-	 



     


    

 


(iii)        to
repay the principal balance of the outstanding Advances, until such amounts are paid in full;


 


(iv)        first,
(A) to pay any indemnification obligations and other unpaid payment obligations owed by the Borrower under any Credit Document
(ratably among the parties entitled thereto in accordance with the amounts owed to each such party), second, (B) to pay 33 1/3%
of the Startup Expenses, up to a maximum amount not to exceed any Net Realized Gains, third, (C) to pay any expenses of Warehouse
Collateral Manager payable by the Borrower and fourth, (D) to pay any remaining accrued and unpaid expenses of the Borrower unrelated
to the Credit Documents; and


 


(v)         the
remaining Available Amount, to the Borrower for distribution to the Equity Investors.


 


For the avoidance of
doubt and notwithstanding anything in this Article VI to the contrary, if the Closing Date does not occur and there
exists Net Realized Gains, 33 1/3% of any Startup Expenses shall be paid out of the Net Realized Gains (to the extent such
Net Realized Gains are sufficient to pay such portion of the Startup Expenses) as provided in clause (iv) above. If the Closing
Date does not occur or to the extent Net Realized Gains are insufficient to pay such portion of the Startup Expenses, the amount
by which the Startup Expenses exceed the amount of Startup Expenses paid pursuant to clause (iv) above shall be paid by MS&Co.
and the Warehouse Collateral Manager pursuant to a separate agreement between them.


 


For the avoidance of
doubt, if, after the application of the Available Amount, amounts specified in Section 6.2(a)(i), (ii), (iii),
(iv)(A) and (iv)(B) are not paid in full, an Event of Default shall be deemed to have occurred
and the Collateral Agent shall, at the direction of the Administrative Agent, exercise all rights and remedies provided for by
the Collateral Documents in accordance with the terms thereof or any other remedies provided by applicable law, including, without
limitation, rights and remedies of a secured party under the UCC.


 


 


(b)          If
the Closing Date occurs, on the Maturity Date, the Collateral Agent, as directed by the Administrative Agent, shall make the following
distributions from the Available Amount and CLO Proceeds:


 


(i)          The
Collateral Agent shall distribute the Available Amount to pay the amounts set forth in Section 6.2(a)(i) and (ii)
(sequentially in the order of priority set forth above);


 


(ii)         The
Collateral Agent shall distribute CLO Proceeds to pay the amounts set forth in Section 6.2(a)(i) and (ii)
(sequentially in the order of priority set forth above), to the extent such amounts were not paid from the Available Amount and
until such amounts are paid in full;


 


(iii)        The
Collateral Agent shall distribute CLO Proceeds to pay (A) the amounts set forth in Section 6.2(a)(iii), (B) the
Startup Expenses and (C) pari passu, based on amounts owed the structuring fee described in the Engagement Letter and
payable to MS&Co. pursuant to the definitive documentation in respect of the CLO, in sequential order beginning with the amounts
set forth in clause (A) of this Section 6.2(b)(iii), until such amounts are paid in full;


 




    	 	-17-	 



     


    

 


(iv)        The
Collateral Agent shall distribute CLO Proceeds to pay the amounts set forth in Section 6.2(a)(iv)(A) and (C)
and (v) (sequentially in the order of priority set forth above);


 


(v)         The
Collateral Agent shall distribute the Available Amount to pay the amounts set forth in Section 6.2(b)(iii) and the
amounts set forth in Section 6.2(b)(iv), in the sequential order stated in each such section beginning with the amounts
set forth in Section 6.2(b)(iii), to the extent such amounts were not paid from CLO Proceeds pursuant to the foregoing
clauses (iii) and (iv) of this Section 6.2(b) until such amounts are paid in full;


 


(vi)        After
application of the CLO Proceeds and the Available Amount pursuant to the foregoing clauses (i)
through (v) of this Section 6.2(b), the Collateral Agent shall distribute first, from the remaining
Available Amount and second, from any remaining CLO Proceeds, to the Equity Investors, an amount equal to the Redemption
Amount; provided however that the Borrower may satisfy the payment of such amounts set forth in this
clause (vi) through the exchange of all or a portion of the membership interests into CLO Subordinated Notes in
accordance with their terms and as agreed by the applicable Equity Investor; and


 


(vii)       After
making the required distributions pursuant to the foregoing clauses (i) through (vi), the Collateral Agent
shall distribute any remaining Available Amount to the Borrower and the Borrower shall retain such Available Amount, together with
any CLO Proceeds remaining after the application of the foregoing clauses (ii) through (vi) of this Section 6.2(b),
to be used in the manner required by the CLO documentation.


 


For the avoidance of
doubt, if, after the application of the Available Amount and all the CLO Proceeds, amounts specified in Section 6.2(b)(i),
(ii) or (iii) are not paid in full, an Event of Default shall be deemed to have occurred and the Collateral
Agent shall, at the direction of the Administrative Agent, exercise all rights and remedies provided for by the Collateral Documents
in accordance with the terms thereof or any other remedies provided by applicable law, including, without limitation, rights and
remedies of a secured party under the UCC.


 


SECTION 6.3           Distributions
on Interest Payment Dates other than the Maturity Date and on Prepayment Dates.


 


(a)          On
each Interest Payment Date other than the Maturity Date, the Borrower shall apply all available Interest Proceeds in the following
order of priority: (i) to pay the Lenders all interest due to the Lenders on such date, (ii) if a Borrowing Base Deficiency
has occurred and is continuing, to cure such Borrowing Base Deficiency and (iii) so long as no Event of Default or Unmatured Event
of Default is continuing, the remaining amounts to the Equity Investors.


 




    	 	-18-	 



     


    

 


(b)          If
a Prepayment Date occurs, the Borrower shall pay the Lenders, by applying all available Interest Proceeds, all interest due to
the Lenders in respect of the principal amount of any Advance prepaid on such Prepayment Date.


 


(c)          Any
interest that is unpaid on any Interest Payment Date or Prepayment Date, as applicable, shall accrue interest in accordance with
Section 2.08(b) of the Credit Agreement.


 


(d)          Interest
Proceeds shall be used solely for the following purposes: (A) to satisfy the Borrower’s obligations to the Lenders and
the Equity Investors under clauses (a) and (b) of this Section 6.3 and (B) to make the payments required
by Section 6.2. Interest Proceeds shall be retained in the Custodial Account and may be invested in Eligible Investments
at the direction of the Warehouse Collateral Manager (except during the continuance of an Event of Default, when such direction
may be given by the Administrative Agent) until such amounts are required to be applied in accordance with the preceding sentence.


 


SECTION 6.4           Payments
Generally. All payments required to be made to the Lenders under the Credit Documents shall be made by the Collateral Agent
to the Administrative Agent for distribution to the Lenders. All other payments shall be made by the Collateral Agent directly
to (or upon the direction of) the Persons entitled thereto. All payments made to the Equity Investors in their individual capacities
shall be made on a pro rata basis, determined on the amount of membership interests held and capital contributions made by each
Equity Investor (as reported to the Collateral Agent by the Borrower or the Warehouse Collateral Manager on its behalf). The Collateral
Agent shall consult with the Administrative Agent and the Equity Investor with respect to the calculation of amounts payable under
this Article VI.


 


ARTICLE
VII



MISCELLANEOUS PROVISIONS


 


SECTION 7.1           Waivers,
Amendments, etc. The provisions of this Security Agreement may from time to time be amended, modified or waived by a written
instrument executed by the Borrower and the Collateral Agent and consented to, in writing, by the Administrative Agent; provided
that any amendment to Section 4.7 or Article VI shall also require the consent of the Equity Investor and
the Warehouse Collateral Manager. No failure or delay on the part of the Collateral Agent in exercising any power or right under
this Security Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrower
in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Collateral
Agent under this Security Agreement shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.


 


SECTION 7.2           Notices.
All notices, demands, requests, consents, approvals and other communications hereunder shall be in writing (including by e-mail)
and directed to the address or e-mail address described in and deemed received in accordance with the Credit Agreement.


 




    	 	-19-	 



     


    

 


SECTION 7.3           Headings.
The various headings of this Security Agreement are inserted for convenience only and shall not affect the meaning or interpretation
of this Security Agreement or any provisions hereof.


 


SECTION 7.4           Severability.
To the fullest extent permitted by law, any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction
in any respect shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
in such respect only without invalidating in any other respect any such provision or the remaining provisions of this Security
Agreement or affecting the validity or enforceability of such provision in such respect in any other jurisdiction.


 


SECTION 7.5           Execution
in Counterparts. This Security Agreement may be executed by the parties hereto in several counterparts (including by e-mail),
each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery
of an executed counterpart of a signature page of this Security Agreement by electronic mail shall be effective as delivery of
a manually executed counterpart of this Security Agreement.


 


SECTION 7.6           Governing
Law. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, without regard to principles of conflicts of laws.


 


SECTION 7.7           Binding
Power; Successors and Assigns. This Security Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Equity Investors, the Warehouse Collateral Manager and their respective successors and assigns; provided, however,
that the Borrower and the Equity Investors may not assign or transfer its rights or obligations hereunder without the prior written
consent of the Administrative Agent (and any attempted assignment or transfer by the Borrower without such consent shall be null
and void).


 


SECTION 7.8           Limited
Recourse Obligations of the Borrower; Bankruptcy Proceedings. The provisions of Section 10.11 of the Credit Agreement
are incorporated into this Security Agreement by reference and shall survive termination of this Security Agreement for any reason
whatsoever.


 


SECTION 7.9           Termination.
Upon the payment in full of all Obligations (other than contingent obligations not then due and payable), the security interest
Granted herein shall automatically and without any further action terminate and all rights to the Collateral shall automatically
revert to the Borrower. Upon any such termination, the Collateral Agent will, at the Borrower’s sole expense, deliver to
the Borrower, or cause the Securities Intermediary to deliver, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all of the Collateral held by the Securities Intermediary
hereunder, and execute and deliver to the Borrower (or such other person as the Borrower shall request) such documents as the Borrower
shall reasonably request to evidence such termination.


 




    	 	-20-	 



     


    

 


SECTION 7.10         Submission
to Jurisdiction. The Borrower hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal
action or proceeding relating to this Security Agreement (including any counterclaim brought in any such action or proceeding),
or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the courts of
the State of New York sitting in New York County, the courts of the United States of America for the Southern District
of New York sitting in New York County, and appellate courts from any thereof; (ii) consents that any such action
or proceeding may be brought in such courts, and waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to
plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at
its address set forth at the beginning of this Security Agreement or at such other address of which the Collateral Agent shall
have been notified in writing; and (iv) agrees that nothing herein shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to sue in any other jurisdiction.


 


SECTION 7.11         Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY MATTER ARISING HEREUNDER. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES HERETO TO ENTER INTO THIS SECURITY AGREEMENT.


 


SECTION 7.12         Third
Party Beneficiaries. Any Person not party to this Security Agreement that is entitled to any payment in accordance with Article VI
shall be an intended third party beneficiary of Article VI.


 


[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY
LEFT BLANK]


 






    	 	-21-	 



     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Security Agreement to be duly executed as of the day and year first above written.


 





	 	Golub Capital BDC 2010-1 LLC,
	 	as Borrower
	 	 
	 	By:	Golub Capital BDC, Inc., its designated manager
	 	 	 
	 	By	/s/ Ross A. Teune
	 	 	Name: Ross A. Teune
	 	 	Title: Chief Financial Officer







  


In the presence of:


 


	 	Witness:	/s/ Nicholas Tholl
	 	Name:	Nicholas Tholl


 


[Signature Page to MS/Golub Security Agreement]


 




     


     


    

 





	 	MORGAN STANLEY SENIOR FUNDING, INC.,
	 	as Administrative Agent
	 	 	 	 
	 	By	/s/ Matthieu Milgrom
	 	 	Name:	Matthieu Milgrom
	 	 	Title:	Authorized Signatory


 


[Signature Page to MS/Golub Security Agreement]


 




     


     


    

 


	 	U.S. BANK NATIONAL ASSOCIATION,
	 	as Collateral Agent
	 	 	 	 
	 	By	/s/ Leslie Hundley
	 	 	Name:	Leslie Hundley
	 	 	Title:	Vice President


 


[Signature Page to MS/Golub Security Agreement]


 




     


     


    

 


	ACKNOWLEDGED AND AGREED:	 
	 	 
	GOLUB CAPITAL BDC 2010-1 HOLDINGS, LLC,	 
	as Equity Investor	 
	 	 	 	 
	By:	Golub Capital BDC, Inc., its designated manager	 
	 	 	 
	By	/s/ Ross A. Teune	 
	 	Name:	Ross A. Teune	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	GC ADVISORS LLC,	 
	as Warehouse Collateral Manager	 
	 	 	 	 
	By	/s/ Joshua M. Levinson	 
	 	Name:	Joshua M. Levinson	 
	 	Title:	Co-General Counsel and Chief Compliance Officer	 


 


[Signature Page to MS/Golub Security Agreement]